Chevron Oronite announced that its expanded dispersant production facility in Gonfreville, France, has reached full start-up and the company has broken ground on a project that will increase detergent production capacity at the plant.

Dispersant capacity at Gonfreville will increase by over 25 percent, and the detergent expansion project will effectively double carboxylate and sulfonate production capacity. Jirong Xiao, vice president sales and marketing, Chevron Oronite, said, These projects, as well as others in our supply chain, will help position us to serve growing markets around the world and to continue providing differentiated engine oil additives for the foreseeable future.

Europes Lube Demand Sluggish

Europe will consume 7 million tons of lubricants annually through 2021, but the continued economic crisis may stunt markets, leading to modest growth only in Russia and Germany, according to Kline & Co. consultants. Major European markets such as the United Kingdom, France, and Italy, as well as the Iberian (Spain and Portugal) and Benelux (Belgium, Netherlands and Luxembourg) countries should all expect reduced lubricant consumption in the next few years as their economies recover, Geeta Agashe, Klines senior vice-president for management, told ACIs European and Base Oils conference held in Budapest in September.

Global lubricants demand reached 39 million tons in 2012, a growth of almost 1 percent over 2011. Passenger car and heavy-duty motor oils accounted for the biggest portion, which was over 43 percent of the total global lubricants demand, said Agashe. Process oils held the second biggest position of the global demand with a 15 percent share. The rest goes to other finished lubricant categories.

On a volume basis, Europe is not a big consumer of lubricants, according to Kline. However, from a value standpoint, [Europes] share is much bigger because it uses the largest volume [in the world] of synthetic and synthetic-blended lubricants, Agashe pointed out. The volume of lubricants consumed in North America and Europe is definitely shrinking, and it was an ongoing trend over the last few years. In contrast, she said, the regions of Asia-Pacific, Middle East, Africa and South America are showing growth.

In Europe, the major lubricants markets are Russia, Germany, United Kingdom, France, Italy, as well as the Iberian and Benelux countries. Together, these top seven markets account for 80 percent of lubricant consumption in Europe and over 90 percent of industrial and automotive production [in Europe], Agashe said.

Key indicators for high lubricant demand in these countries compared to the rest of Europe are their gross domestic production rates, as well as their high levels of auto and steel production. Because of the economic slowdown in Europe, almost all of these countries real GDP growth rate either declined or remained flat from 2008 to 2012, except for Russia, whose real GDP grew by 1.8 percent during those four years, Agashe said.

Russia and Germany lead overall lubricants consumption by a wide margin due to their large vehicle population and strong manufacturing base. Both countries lube demand is expected to grow less than 1 percent annually by 2021, unlike the rest of the group, which is expected to show negative trends in lubricants demand according to Kline.

Last year Russia consumed almost 1.7 million tons of finished lubricants, followed by Germany with around 1.2 million tons of lubes consumed. In 2012, U.K. and France consumed around 700,000 and 600,000 tons respectively, followed by Italy (500,000 tons), Iberia (420,000 tons) and Benelux countries (280,000 tons).

Germany is the largest European market for synthetic and semi-synthetic lubricants, and the high penetration of synthetics extends the average consumers drain interval to up to 15,000 kilometers or one oil change annually. This makes Europe a declining market by volume even without other economic hurdles, Agashe noted. The slate of lubricants consumed in Germany is very different than that which is consumed in Russia. In Germany, for example, one cannot sell lubricants as full synthetic unless polyalphaolefin or API Group IV was used in the lubes formulation. In other countries, lubes made of Group II or Group III base oils are sold as synthetic and semi-synthetic.

While all other countries are below the 2007 high-water mark for consumption, Germany is the closest to a full recovery, according to Agashe. We analyzed that none of the rest of the countries has come back to the 2007 level. Germany is still not there yet completely because it misses only 1 percent to its 2007 peak lubricant volume consumption, she said, adding that there is no organic growth coming out of these lubricants markets and if a company wants to grow, it needs to take market share from its competition.

Neste/Takreer Deal Collapses

Neste Oil, the Finnish refiner and marketer of base oils, has confirmed it will not be marketing API Group II and Group III base oils produced at Abu Dhabi Oil Refining Companys (Takreer) new plant at Ruwais, United Arab Emirates. The development was separately corroborated by Abu Dhabi National Oil Co. (Adnoc).

There are differences over interpretation of the outcome, but the two companies appear to have reached a deadlock over ownership of marketing rights. An executive at Adnocs marketing and refining directorate who asked not to be named said discussions lasted more than two years. We had a lot of proposals from Neste, but we were clear we would not give marketing to a third party.

However, Ulla Kotila, a spokesperson for Neste, said there were concerns over demand. Due to overcapacity in the market, we didnt see demand for the entire output in the short term and decided to go for other commercial alternatives for meeting long term growth. The Ruwais plant, wholly owned by Adnoc, will produce up to 500,000 metric tons per year of Group III and 100,000 t/y of Group II base oils.

Production at the Takreer plant, originally scheduled to commence by the end of this year, will now begin sometime during the first half of 2014, according to the Adnoc executive. There is no set date, but it could be decided by customers we are currently in discussion with. Around 50,000 t/y is earmarked for Adnoc Distribution, a marketer and distributor of petroleum related products primarily in the UAE.

According to analysts, the development with Adnoc may have implications for Nestes joint venture with Bapco, the Bahrain Petroleum Co., a point the Finnish refiner denies. We are fully committed to our JV with Bapco, and we continue producing high quality Group III base oils both in Finland and in Bahrain to serve our customers.

Gazprom Bunkers in Primorsk

Gazpromneft Lubricants is offering marine oil bunkering services at a key Russian port to enhance its maritime product competitiveness and sales, the company announced in October. The sea port of Primorsk on the Gulf of Finland is the largest port for the export of crude oil and petroleum products in the Northwest region of Russia.

Ship lubrication services are commonly offered in Russian and foreign ports. The company hopes that the launch of its bunkering terminal in Primorsk will give its marine oil access to wider distribution channels in Russia and the world, and boost their sales. We supply our products to the largest ports of Russia, the Commonwealth of Independent States and the Baltic, said Alexander Trukhan, the companys general director. Primorsk is a key port in Northwest Russia, and the fact that we have been the first company to initiate the service here is a milestone for development of our maritime lubricant business. The bunkering terminal there will enhance our competitiveness across Russia and the world.

Primorsk port is the final link of Transnefts Baltic pipeline system and Sever, a pipeline for fuels transported from refineries located in western Russia. It is also an important link for transport of crude oil from the oil fields of the Volga-Ural region and Timan-Pechora region located in the Archangel oblast in the northeast part of European Russia.

Last year Gazpromneft Lubricants bought the rights to produce Texaco-branded marine oils. At present it offers over 400 petrochemical products, including lubricants, greases and specialty fluids. Besides Russia, the companys key markets are Southeast Europe (the Balkans), Ukraine, Belarus, Kazakhstan and Central Asia. Its products are marketed in 39 countries.

Vivo Takes over Shell Ghana

Vivo Energy, distributor and marketer of Shell-branded fuels and lubricants across Africa, has acquired a majority shareholding in Shell Ghana Limited. Christian Chammas, CEO of Vivo Energy, said, with the addition of Ghana, the company now operates in 16 countries.

Vivo Energy was established in 2011 by Vitol, Helios Investment Partners and Shell to distribute and market Shell-branded products across Africa. It operates in Ghana, Botswana, Burkina Faso, Cape Verde, Cote d lvoire, Guinea Kenya, Madagascar, Mali, Mauritius, Morocco, Mozambique, Namibia, Senegal, Tunisia and Uganda. According Chammas, Africa is a fast growing continent, and our shareholders will invest $250 million over the next three years to take advantage of this growth.

Chemtura Starts PAO, Grease Plants

Chemtura Corp. has commissioned its new polyalphaolefin plant in Ankerweg, Netherlands, and has started up a grease plant in Nantong, China. The next step will be to send grease samples to customers and original equipment manufacturers in China for testing and approvals. The plant will also make products for other Chemtura businesses including urethanes.

Located outside Amsterdam, the Ankerweg plant uses process technology that is equivalent to that in place at Chemturas existing polyalpholefin plant in Elmira, Ont., Canada. Commercially approved volumes should be ready to ship to customers at the beginning of 2014. Cost of the Ankerweg facility was not revealed nor was the plants capacity. The plant will make conventional high-viscosity PAO in 40 and 100 centiStoke grades under the Synton brand name.